Peters’ principles

Almost 20 years after the publication of In Search of
Excellence, Tom Peters is probably still the world’s top management guru. He
talks to Godfrey Golzen about his latest ideas

Waiting for star speaker Tom Peters to arrive at a recent US
seminar for senior airline executives, the chairman talked about Peters’
achievements. His impressive academic qualifications – doctorates from two of
America’s top universities, first in engineering, then in business
administration – his service record as a young naval officer in Vietnam, his
subsequent attachments to the Pentagon and his later career as a McKinsey
consultant.

It was the latter that eventually led to the book In Search
Of Excellence, co-authored with Bob Waterman, which made them both famous. The
rest, as they say, is history, but the chairman went on and on, with accounts
of Peters’ subsequent life and work. As the minutes ticked by the delegates
became restive because the man they had come to hear was not there – until he
emerged from the shadows, 15 minutes late. "Ladies and gentlemen," he
began, "in your industry this would count as being on time."

His flair for making his point dramatically and with a
certain amount of humour explains why, almost 20 years after the publication of
In Search of Excellence, Peters remains arguably the most famous and probably
the most highly paid management guru. And in a business world that technology
has changed almost beyond recognition. But isn’t he getting a bit tired after
clocking up 1,700 seminars and 4.5 million air miles since 1982, not to mention
the books, the syndicated newspaper columns, the small businesses he runs out
of his base in Palo Alto, his farm in Vermont and his insatiable reading? True,
he’s aged a bit and is going through one of his overweight phases, the
inevitable consequence of too many lunches with business leaders and too many
hotel meals eaten too late at night. It’s not that he’s a big food man,
although he does admit to an interest in cooking. It’s just that he’s so wrapped
up in his work as a lecturer, so generous in the way he is prepared to talk and
listen to members of his audience even when his day is officially over, that he
stays late and eats at times which are bad for the digestion. His seminar
sessions almost always run way over time too.

"I’m an enthusiast," confesses Peters who, in
private conversation, is a much quieter, more thoughtful man than his hectic
platform manner might suggest. "I’m constantly excited by what I see, hear
and read is happening."

The Concise Oxford Dictionary defines a "guru" as
a wise or revered teacher. Peters reminds you of that teacher at school who was
really fired up by his subject, perhaps a little bit eccentric and who
occasionally talked a certain amount of nonsense, but who was never less than
stimulating and ever eager to share and explain new developments in his field.

Peters’ career as a management guru goes back to the days
when most people’s idea of a computer was a mainframe IBM 360, and the electric
typewriter and the copying machine were as technological as office equipment
generally got. Some of the 43 companies whose practices were singled out as
being "excellent" were indeed at the forefront of the coming computer
age, including IBM itself. But within five years, two-thirds of them were in
varying degrees of trouble and some have since gone out of business.

So how did he and Waterman get it so wrong? It’s a question
that’s often been asked by sceptics, but it’s not one that has ever fazed
Peters. "It doesn’t invalidate the ideas we put forward about the
importance of closeness to customers, of listening to the people they serve,
and of fostering innovation and entrepreneurship. What I got wrong and what the
companies that fell by the wayside got wrong was that change happened much
faster than had been predicted. That’s still true. So what I’m talking about a
lot of the time now is the scale and speed of change." In this situation,
he suggests, speed of action may be even more important than quality.

Not to be afraid of getting it wrong has become part of his
message. "Look at Churchill," he told a British audience at a seminar
organised by The Economist in December 2000. "His career was littered with
disasters, but he is rightly remembered as one of the great men of the 20th
century because he wasn’t afraid to act boldly."

In the business world, he points to the example of Enron, a
widely admired and successful US utility company. "Two-thirds of the
stories told at senior management meetings are not about successes but about
mistakes." The point about not burying mistakes is not just the obvious one
that you learn from them. "Mistakes are often just a matter of bad timing.
At a later point you may find that in a new context they are the right
answer."

He is not concerned about dot-com failures either. He
compares their fluctuating fortunes to what happened in the early days of
another great communication revolution, the building of the railways across
America. "Horrible mistakes were made about basic stuff like agreeing a
uniform gauge for lines across the country. Entrepreneurs and investors were as
likely to lose their shirts as to become rich. But the railways would never
have got built in anyone’s lifetime if they hadn’t done a lot of dumb stuff and
done it quickly. How do children learn to walk, for God’s sake? They do it by
constantly falling over until they get it right." One of the mantras that
has been a Peters message from the beginning is that the way to respond to
change is "Ready. Fire. Aim."

It’s not an easy one to follow, particularly for big,
process-led companies. The trend there is to deal with change by seeking safety
in numbers so large that smaller competitors cannot challenge them; hence the
huge rise in mergers and acquisitions. "You don’t get small, fleet-footed
creatures by mating two dinosaurs," is his pithy comment on mega-mergers,
like the recent one between Glaxo Wellcome and SmithKline Beecham to create the
world’s biggest drugs group.

In a typical imaginative leap, Peters suggests that
companies should learn from the bees. "When the hive gets too big, they
split off into smaller colonies." The corporate equivalent of this is what
happened at the US$25bn Swiss-Swedish electrical power group ABB which, under
the leadership of Percy Barnevik, was restructured into some 5,000 profit
centres operating throughout the world. The model corporations should look at,
Peters is currently arguing, are professional service firms, such as those of
lawyers, accountant, architects and engineers. "Professional firms are not
very big and don’t have a continuous, predictable source of work," he
explains. "They have projects with clear objectives, cost and time
targets, they work in teams, often as part of a network involving other
professional firms, and they are judged and rewarded on an agreed set of
results."

Looked at another way, finding such work is also a survival
strategy for individuals who are having to come to terms with the fact that by
2010 full-time workers will be in the minority. "Volunteer for crappy
jobs," is a typical piece of Peters advice. "Even a small assignment
carries the DNA of a big one. And never accept the assumptions that go with
it." That last comment is part of his message that e-commerce has created
"a brawl with no rules", in which the way we do things has to be
constantly reinvented. He points to the example of companies like the software
giant CISCO, which is solving 45,000 customer problems a week through a
chatroom facilitated by the company but conducted by the customers themselves.
In effect, CISCO is getting US$1bn a year’s worth of free consultancy this way.

Getting to grips with the Web is integral to survival, both
for corporations and individuals, and there is probably no management guru who
has engaged with the new economy more thoroughly than Peters. A consequence of
the fact that information and data can now flow globally at the speed of light,
is the drive towards commoditisation. "Everything is better but everything
is much the same," is how this has been put. Peters believes that in the
new economy, competitive advantage will be with those who can create what he
calls "the WOW factor". The Sydney Olympics were a case in point.
What created worldwide attention were not so much the events themselves, with
their converging standards, but the spectacular opening and closing ceremonies.

In the global search for talent, people who can create that
kind of effect are in great demand and that is being reflected in their
rewards. Peters believes that some of the high prices being paid for
acquisitions are not, in fact, for the companies or even their brands, but for their
brains. "If you look at the figures on the basis of a price being paid per
head of talent, they often look remarkably cheap."

Peters is an evangelist for management, and is sometimes
criticised for his somewhat Billy Graham-like approach to his subject. But
underlying it all is his doctorate in engineering. He does the numbers, and one
set of numbers he is currently looking at with great interest is the US women’s
market, which he says is the world’s biggest, and most neglected, consumer
group. Their purchasing power represents a market bigger than the Internet. If
Peters is right about this and turns his formidable intelligence to marketing
strategy, a whole new audience awaits him in the 21st century.

Survival skills for the new economy

– Be damn good at something.

– Be aware of the importance of your Rolodex of contact
names.

– Be a finisher – clients pay for completed work, not bright
ideas.

– Have an intense appetite for and interest in technology.

– Grovel before the young.

– Be able to adapt and improvise.

– Develop entrepreneurial instincts.

– Have a passion for renewal.

– Individually, be aware that your knowledge is a rapidly
depreciating asset. Make sure you have a Renewal Investment Plan and that your
employer contributes to it.